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Saturday, May 13, 2017

The squeeze on US workers

America is getting richer every year.The American worker is not.On average, workers born in 1942 earned as much or more over their careers than workers born in any year since, according to new research — and workers on the job today shouldn’t expect to catch up with their predecessors in their remaining years of employment.

Stagnant or falling earnings have put a squeeze on working- and 'middle-class' households. The trend has also widened the gap between the rich and everyone else as, overall, the economy has continued to grow but the bulk of those gains have ended up in the pockets of the affluent. The new paper suggests ordinary Americans have been dealing with serious economic problems for much longer than may be widely recognized, said Gary Burtless, an economist at the non-partisan Brookings Institution who was not involved in the research. "The stagnation of living standards began so much earlier than people think." The study, the economists — from the University of Minnesota, the University of Chicago, Princeton University and the United States government — examined career earnings for workers born in every year since 1932. They did not include those who didn’t work or only rarely worked, instead concentrating on those who spent at least 15 years in the labour force. Using wage and salary data from the federal Social Security Administration, they calculated the career earnings of the median worker born in each year.For instance, the typical 27-year-old man’s annual earnings in 2013 were 31 per cent less than those of a typical 27-year-old man in 1969. The data suggest that today’s young men are unlikely to make up for that decline by earning more in the future.Women are making less than men over their working years, and women’s rising earnings have not made up for the decline in men’s incomes for the population as a whole. Recently, women’s progress has stalled, in part due to the financial crisis. The typical female worker who was 27 in 2013 made no more than the typical woman of that age did in 1980.As more women entered the labour force, median household incomes rose even as incomes of individual workers of a given age stagnated, with families using extra workers to bring home more money. But that climb ended in 1999, and since then, median household incomes have fallen, according to the census. The results show that more unequal incomes are not just a result of a widening gap between younger and older workers. Even among older workers, typical incomes have been falling while the wealthiest have been enjoying more and more of the economy’s gains. Poorer workers — who tend to be younger — will earn more as they get older, but they are not likely to earn enough to make up the difference."Overall, this is a pretty bleak picture," said Fatih Guvenen, an economist at the University of Minnesota